When I visited SAN in May, the local real estate section of the Sunday paper (used to be the Union) stated that folks were paying $200.K - $300.K to live in the Imperial Valley and commuting 4 -5 hours or more a day.
My tiny 1450 Sq Ft house in University City (SAN) was purchased no $$ down VA for $56.5K in 1975 and sold for $143.K in 1980. That was just the beginning.
M

My original thread has run wild! Thanks for all the info everyone. We don't HAVE to move to SF, my husband is just looking for another job. He is in computers and there are obviously lots of programmer jobs in that area. All this real estate info blows my mind!

KT, not everyone buying homes in CA has rich parents or are millionaires. Hard work and skipping the $100 Nikes and daily Starbucks latte goes a long way!

Thanks everyone for such long and detailed information about this housing market. As I have bought and sold quite a bit in three states, I find that it was extremely interesting and educational.

I have a relative through marriage that is the closest thing to a native Californian that exists as she is 60's and was born from two generations there before her. She was a teacher in San Jose and has left. She was priced out before her retirement age. Single and a teacher, couldn't keep up on housing costs and taxes etc. As well as becoming a millionaire, you could also really take a tumble when this bubble breaks. And it will, eventually. Kudos to all of you who take the chance, but it is a chance. There will come a time when the buyers don't line up.

JJ5 so maybe the "bubble" bursts and then what? the house I paid less than $200 for will only be worth $300? oh no! Sorry but California will never be cheap. It may not continue at it's current rate of inflation but it won't be bottoming out without some major changes in the world.
what about dc, new york city, providence, boston, etc. california is not alone on the list of places people will pay more to live in.
everything in life is a risk, owning your own home makes life feel less risky.

The only way the California/NYC etc real estate bubble will burst is if the entire world goes into a prolonged depression - like 1929. Barring that there may be little glitches - the NYC housing market was stagnant for a couple of years following the last market drop (1989?) - but that was it - prices stayed steady - they didn;t drop. And since then they have ballooned again.

There is no going back on this. It's like oceanfront property. the amount is limited - there will never be more - and the price can only go up.

(And for those who decry inflation - wondering when it will end - there has been steady worldwide inflation since the Americas - and all that gold/resources - were discovered by europeans in the 15th century. Since inflation has been continuing steadily for over 500 years - I wouldn;t expect it to stop any time soon.)

Alisa, I think your Nike and Starbucks comment is pretty insulting. In San Diego now,only 10% of the population could afford to buy a house. The others do work hard, but they don't work at jobs that pay high salaries. Most people don't. Few of my neighbors, whose homes are "valued" at $700,000-$850,000 could afford to buy the house they live in. Most of the people buying new homes are trading up. San Diego is widely acknowledged to be a huge real estate bubble which will burst one day. Homes are taking several months to sell now, and many are having to begin reducing prices. This is not a time to buy a house on a 100% loan.

There is a big down side here and it is that businesses are reluctant to move to California, not because of taxes which are not by any manner of means the highest in the country, but because they don't want to have to pay their employees enough to enable them to buy homes.

And, if I remember this right, givine the cost of living in the Bay Area, a single mother with 1 child has to make at least $21 hour to pay expenses and not require subsidies(Section 8, childcare,food stamps etc). That means rent not a mortgage I assume.

Kudos to LoveItaly who tells it well.

It doesn't need a world wide depression to happen. I have seen ocean homes in ruins because no one could take over their costs. You may not have an "out" when you want one. You could be a millionaire on paper, but eventually you are going to keep out, who? The people you need to complete a community. Where are your police, teachers, garbage men, firemen, etc. going to live?

It will become like many places in Europe where properties are not really bought and sold in some areas, but are left through ancestoral types of trusts with all kinds of societal repercussions.

Sounds to me like it is hog heaven for real estate agents. Of course you are going to get quite cynical letting them play those kinds of bidding games with you- a seller's market, ouch. But you know that they, the real estate agents, are REALLY the ones that are making it on your stretch.

Alisa, I work hard, (have since I was 15), don't drink coffee, buy my sneakers at Shoe Pavilion, and save like the devil. That's how I've managed to pay off student loans for five full years of higher education. Yet somehow I just can't scrape together the half a million it takes to buy a tiny house here in my town. But thanks for the lecture.

Four more years! It can only get worse now!

I live in Arlington, VA....my home I paid 800K for three years ago is now worth 1.5 million. $700,000..that's dirt cheap!

Although Alisa's comments may not apply to everyone, she does have a point. There are plenty of people who could afford to purchase a home if they prioritized their spending, but they don't.

Oh, yeah, there was one more thinkg that I forgot to say. Not everyone is part of a couple. And there's a big difference between two people buying a grossly overpriced little cottage and one person doing the same thing.

With the insane home prices there, how is it people are paying 1/2 million for a dangerous slum? Doesn't slum mean bad? With the prices wouldn't the poor-slum people get pushed out by poor-need-a-house-to-live-in people?

North Carolina isn't anywhere near your real estate prices, but my I could probaly sell my home for 40% more than what I paid for it 5 years ago. However, I'm in the lower end of hte real estate market. There are a glut of homes at $150,000 and above with new ones built everyday.

JJ5, you are really getting under my skin! I am a real estate agent. I do not believe in creating bidding wars but you better believe that sellers do. PEOPLE are greedy not just real estate agents. As for the amount of money I make, I work hard for it. I am available 24 hours a day, I drive people around, I buy them lunch, I am a marriage counselor, a financial advisor, a support system, and more. I work a great many hours for people who may never buy or sell a home. Every once in a while I make "easy" money in a transaction with few obstacles which makes up for the work I do without payment.
I believe that teachers, nurses, firefighters and the like are underpaid and I think it's awful that they can't afford to buy homes in every part of the country but don't you try to blame it on me.

I actually can't stand it when people decry "affordable housing". It's so annoying. It's like doctors who decry the cost of healthcare but refuse to work for free.

Come on people! Anyone can buy a house if you live within your means and save, save, save.

Why don't people yell at homesellers who refuse to sell their homes for less? How ridiculous, right?

Why don't people decry that Mercedes charges too much for their cars? Whatever. You have other options.

They may not be what you "want" but such is life.

Who else wants to pay $100,000 for a 5,000 sf. house on the coast of SoCal and have a 5-minute commute? Hello?! Unbelievable how people feel entitled to pay whatever they want for something they want.

eactly - I want that cute little Lexus Sport for $10,000 - how do they have the nerve to ask more for it! (I know I could get a second-hand Accord instead - or not go out for lunch every day - but I really want that Lexus for $10,000 - why can;t every one see that's all its really worth?)

trishiad - Our real estate agent was terrific and definitely earned his commission when we bought our house. I'm sure there are shady agents out there and those who don't know what they are doing, but IMO, a good agent his worth his or her weight in gold.

Okay. Here it is again, folks. If you cannot afford the home that you want, then subscribe to something called delayed gratification.

Buy a house that is currently under construction in a community within 1.5 hours commute, using an I/O loan and either stay put and Refi into a fully amortized loan because you fall in love with it, or flip it for another home, using the equity as your d.p. so that you're not "house poor" due to your mtge pmt being 49% of your monthly disposable.

You don't need a second job just so that you can drive a nicer car from one to the other.